Jan. 31, 2023 - International Paper today reported full-year and fourth quarter 2022 financial results.
FULL-YEAR AND FOURTH QUARTER 2022 HIGHLIGHTS
"In 2022, International Paper grew revenue and earnings in a dynamic and challenging macro environment and returned $1.9 billion to our shareowners," said Mark Sutton, Chairman and Chief Executive Officer. "Our commercial and mill operational performance was solid, while significant inflation and lower demand impacted margins. We also delivered $250 million of earnings benefits from our Building a Better IP initiatives, exceeding our target for the year and building solid momentum going forward."
Sutton added, "As we enter 2023, International Paper is well-positioned to navigate various economic environments from a position of strength, given our strategic customer relationships, our highly talented teams, our track record of solid cash generation and our strong balance sheet. We also remain focused on creating value for all our stakeholders as we continue Building a Better IP."
SEGMENT INFORMATION
Business segment operating profits are used by International Paper's management to measure the earnings performance of its businesses and is calculated as set forth in footnote (h) below under "Sales and Earnings by Business Segment". As a result of the spin-off of our global Printing Papers business on October 1, 2021, the Printing Papers business segment has been eliminated and all prior year amounts have been adjusted to reflect this business as a discontinued operation. For discussion of discontinued operations, see the disclosure under Discontinued Operations included later in this release. Fourth quarter 2022 net sales by business segment and operating profit (loss) by business segment compared with the third quarter of 2022 and the fourth quarter of 2021 along with full-year 2022 net sales by business segment and operating profit (loss) by business segment compared with full-year 2021 are as follows:
Industrial Packaging operating profits (losses) in the fourth quarter of 2022 were $416 million compared with $369 million in the third quarter of 2022. In North America, earnings increased driven by higher sales prices for corrugated boxes and lower input costs, primarily for recovered fiber and energy. Sales volumes for corrugated boxes and containerboard were lower, reflecting continued consumer spending focus on non-discretionary goods and retailer inventory destocking. Lower demand resulted in increased economic downtime which negatively impacted operating costs. Operating costs also increased due to seasonality, inflation and the impact of Winter Storm Elliott. In EMEA, earnings improved driven by seasonally higher sales volumes in Morocco and lower energy costs.
Global Cellulose Fibers operating profits (losses) in the fourth quarter of 2022 were $35 million compared with $95 million in the third quarter of 2022. Earnings decreased driven by higher planned maintenance outage expenses and lower sales volumes, partially offset by higher sales prices for fluff pulp and lower input costs, primarily for energy. Volume was lower due to additional pull through of shipments in the third quarter as supply chain velocity began to improve. Operating costs were higher driven by the impact of Winter Storm Elliott and isolated reliability incidents.
EQUITY METHOD INVESTMENT - ILIM JOINT VENTURE
On January 24, 2023, the Company announced an agreement to sell its investment in the Ilim joint venture, subject to regulatory approvals. The Company recognized a $533 million impairment charge in the fourth quarter of 2022. The impairment charge includes recognition of $375 million of foreign currency cumulative translation adjustment loss. Equity earnings (losses), excluding impairment, were $44 million in the fourth quarter of 2022 compared with $64 million in the third quarter of 2022. The current period and historical results have been adjusted to reflect Ilim as a discontinued operation and our investment balance, following the adjustment to fair value and resulting impairment charge, is included in Assets Held for Sale.
International Paper's complete Full-Year and Fourth Quarter 2022 report with tables and attachments can be found on the company's website: www.internationalpaper.com.
International Paper (NYSE: IP) is a leading global supplier of renewable fiber-based products. The company produces corrugated packaging products that protect and promote goods, and enable worldwide commerce, and pulp for diapers, tissue and other personal care products that promote health and wellness. Headquartered in Memphis, Tennessee, IP employs approximately 38,000 colleagues globally.
SOURCE: International Paper
Paper Industry Newsletter
Stay on top of paper industry news
from around the world with
PaperAge's free weekly newsletter.
Delivered every Thursday.
Sign up today!